Kraft Heinz Co Q4 FY2024 earnings call

Carlos Abrams-Rivera thanked the Kraft Heinz team for their hard work, mentioned staying focused on building for the future, improving profit margins, and boosting free cash flow while returning $2.7 billion to stockholders. For 2025, they expect improving top line and preserving profitability. Growth pillars have head starts: 75% of new customer wins locked in for Away From Home, 17% distribution increase with new points planned in Emerging Markets, and 75% of 2025 innovation pipeline locked in for North America Retail. They leverage the Brand Growth System, invest in price, product, and marketing, use technology-led solutions for efficiencies, and shift marketing dollars to consumer-facing. Andre Maciel added that top line improvement isn't only from price, involves lapping challenges and product enhancements, expects gross margin efficiencies ahead of inflation, and prices linked to commodities.

In 2025, Emerging Markets are expected to exit at double-digit growth, Away From Home will see gradual improvement, ACCELERATE platforms in the US will recover with an elongated recovery. Cash conversion is expected to be around 95%. The tax impact from a $2.4 billion P&L gain translates to approximately $120 million cash gains per year for 20 years, affecting cash tax rate by 200-300 bps.

Tax rate increase, supplier issues affecting Lunchables in Q1 leading to softness in January data, consumer adaptation to deal buying potentially causing volume drag despite promo changes.

Q: Andrew Lazar asks about confidence in investment plan given market share trends.

A: Carlos talks about growth pillars, Brand Growth System, investments in price, product, marketing.

Q: Peter Galbo asks about organic sales growth pillars and market growth comparison.

A: Andre talks about Emerging Markets, Away From Home, ACCELERATE platforms; Carlos mentions strategy unchanged.

Q: John Baumgartner asks about marketplace activities, promo changes.

A: Andre talks about base volume, promotions; Carlos mentions consumer shopping behavior.

Q: Kenneth Goldman asks about tax rate increase.

A: Andre explains P&L tax benefit, cash tax rate impact.

Q: Leah Jordan asks about Lunchables recovery.

A: Carlos talks about supplier issue lingering, Brand Growth System investment; Andre talks about SKUs affected, service resolution.

Q: Thomas Palmer asks about organic sales inflection.

A: Andre talks about Q2 improvement from Easter, lapping plant downtime, price investments.

Q: Michael Lavery asks about marketing spending.

A: Carlos talks about marketing spending per brand/country, shifting nonworking to working; Andre talks about Brand Growth System, media investment increase.

Q: Christopher Carey asks about underperformance relative to categories.

A: Carlos talks about focus on 4 brands in US Retail, Brand Growth System; Andre talks about different category approaches.

Q: Alexia Howard asks about GLP-1 impact.

A: Carlos talks about no meaningful impact, focusing on protein/hydration alternatives, Taste Elevation platform.